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Sector to push for flexibility over extra affordable housing funding

Housing sector leaders will call on the government to allocate £9.1bn of affordable housing funding on a flexible basis, following Theresa May’s announcement of £2bn of extra funding yesterday.

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Government should be flexible with extra affordable housing funding, say sector leaders

At the closing of the Conservative Party conference on Wednesday, prime minister Theresa May announced extra funds for the Homes and Communities Agency’s Affordable Homes Programme 2016/2021, with funding allowed for social rent homes in areas with “greatest need”.

This will mark the first time since taking power in 2010 that the government has directly funded social rented housing, with a press statement promising grant rates of £80,000 per unit.

It also marks a huge boost in funding available for affordable housing, compared to £4.5bn for the 2011/15 programme and £2.95bn available between 2015 and 2018.


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David Orr, chief executive of the National Housing Federation (NHF), told Inside Housing the announcement is a “huge change in tone and approach”.

He said the NHF would seek “a strategic conversation with [government] about how the money can be best used”.

“Our view is still that the more flexibility that can be provided, the better chance you have of providing the homes people need. We need to get away from small-scale, scheme-based funding and enter into larger-scale deals with government to provide homes,” he said.

David Montague, chief executive of L&Q, said the £2bn affordable housing funding announced today is a “big step in the right direction” but should be used more “creatively”.

He said: “Now we’ve got this commitment from government it’s time for us to sit down with them and to think creatively about how we use the funds that are available in the best possible way.”

Housing association chief executives, including Mr Montague, said they would be applying for the £2bn fund.

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Mark Henderson, chief executive of Home Group, said it was “encouraging” that housing associations are “seen as part of the future”, after Ms May name-checked the sector in her speech.

He said the reference to social rents in the most pressured areas was a “nod” towards the needs of the housing market in the North differing from the South.

Brendan Sarsfield, chief executive of Peabody, said the funding was a “good start” and represented a less restricted funding regime.

Angela Lockwood, chief executive of North Star Housing, said: “It’s the first time in years I’ve heard this government talk warmly about social housing.” However, she said concern over the Local Housing Allowance cap for supported housing and the rent settlement post-2020 are still “incredibly critical issues that we’re grappling with”.

Ms May promised to provide “certainty” over rents but stopped short of announcing a new settlement. Mr Orr said the NHF was pressing government for more detail on what shape the deal would take.

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